Overview
- The national average for diesel climbed above $6 per gallon this week, with California averages reported above $7–8 and several stations showing the $9.999 pump‑display maximum.
- The spike reflects layered supply shocks from the Iran war that disrupted Strait of Hormuz shipping, Houthi attacks around the Red Sea, Ukrainian strikes on Russian refineries and Russian limits on diesel exports.
- Refiners say they are operating near 100% capacity, which limits how quickly crude or Strategic Petroleum Reserve releases can be turned into more diesel at the pump.
- Higher diesel is already adding freight fuel surcharges and raising costs for trucking, farming and shipping, which is feeding into grocery prices and has boosted market odds of a near‑term Federal Reserve rate hike.
- The shortage highlights slow limits to boosting refining capacity, the outsized role of shipping chokepoints like the Strait of Hormuz and Bab el‑Mandeb, and the risk that further price spikes could deepen inflation and economic strain.